ex10-2.htm


    Exhibit
10.2

    


    November
30, 2009

    


    


    Escrow,
LLC

    dba
Escrow and Agent Service Co., LLC

    215
Mockingbird Lane

    Warrenton,
VA 20186

    Attention
of Johnnie Zarecor

    Tel:
540-347-2212

    Fax: 540-
347-2291

    Email:
jzarecor@escrowllc.net

    


    Re:  Make Good Escrow Agreement
(the “Agreement”)

    


    Gentlemen:

    


               This
Agreement will set forth the terms pursuant to which China Power Equipment,
Inc., a Maryland corporation (the “Company”), will deposit into
escrow with you (the “Escrow
Agent”) 2,080,000 shares of common stock, par value $0.001 per share, of
the Company (the “Common
Stock”), which are the shares defined as the Make Good Shares in that
certain securities purchase agreement (the “Purchase Agreement”), dated
November 30, 2009 among the Company, Barron Partners L.P. (“Barron Partners”) and the
other investors named therein.  Barron Partners and the Company shall
be collectively called “Interested
Parties”.

    


    1. The
Escrow Agent agrees to hold the Make Good Shares on and subject to the terms of
this Agreement.  The parties acknowledge that the Escrow Agent is not
and will not be a party to the Purchase Agreement.  The Escrow Agent
has and will have no obligations under the Purchase Agreement, and the Escrow
Agent’s only obligations are those expressly set forth in this Escrow
Agreement.

     

    2. The Make
Good Shares will be issued in the name of Escrow, LLC, as escrow agent. The Make
Good Shares shall not have any voting rights while they are held by the Escrow
Agent pursuant to this Agreement.

     

    3. Section
6.9 of the Purchase Agreement provides for the transfer of some or all of the
Make Good Shares to the Investors named in the Purchase Agreement.  If
the Escrow Agent receives the joint written notice from Barron Partners, on
behalf of the Investors, and the Company as to the disposition of any or all of
the Make Good Shares, the Escrow Agent shall distribute the Make Good Shares in
accordance with the joint written instructions.

     

    4. If the
Escrow Agent receives written instructions signed by either but not both of
Barron Partners and the Company, the Escrow Agent shall, within five (5)
business days from its receipt of such instructions, send a copy of such
instructions to the other party by overnight courier service which provides
evidence of delivery.  If, by the close of business on the fifteenth
(15th)
business day after delivery of the instructions to the other party, the Escrow
Agent shall not have received notice from any of the other Interested Parties
either disputing the instructions or otherwise instructing the Escrow Agent to
take action inconsistent with the original instructions, the Escrow Agent shall
distribute the Make Good Shares in accordance with the instructions initially
received by it.

     

    5. If the
Escrow Agent shall have received notice from the other Party by the close of
business on the fifteenth (15th)
business day after delivery of the instructions disputing or conflicting with
the initial instructions, the Escrow Agent shall retain the Make Good Shares
until it shall have received either (a) joint written instructions from the
Company and Barron Partners or (b) a court order, final beyond right of review,
as to the disposition of the Escrow Property, in which event the Escrow Agent
shall distribute the Make Good Shares in accordance with such instructions or
court order.

     

    6. In the
event that the Escrow Agent shall be uncertain as to its obligations with
respect to the Make Good Shares, or shall receive instructions, claims or
demands which, in the Escrow Agent’s opinion, are in conflict with each other or
with any of the provisions of this Agreement, the Escrow Agent shall refrain
from taking any action other than to keep safely all Make Good Shares until the
Escrow Agent shall have written instructions from all Interested Parties as to
the disposition of Make Good Shares or until the Escrow Agent is directed by a
final judgment of a court of competent jurisdiction final beyond right of
review.  In addition, in such circumstances, the Escrow Agent may
deposit the Make Good Shares into court, there to abide a decision of the
court.  In this connection, each of the parties consents to the
exclusive jurisdiction of the federal and state courts located in the City,
County and State of New York.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          Page
2

        

      

    

     

     

     

    7. This
Agreement shall terminate upon a distribution of all of the Make Good Shares
pursuant to Section 3, 4, 5 or 6 of this Agreement.

     

    8. The
Interested Parties shall jointly and severally (i) reimburse the Escrow Agent
for all reasonable expenses incurred by the Escrow Agent in connection with its
duties hereunder  and (ii) indemnify and hold
harmless the Escrow Agent against any and all losses, claims, liabilities,
costs, payments and expenses, including
reasonable legal fees for counsel who may be selected by the Escrow Agent, which
may be imposed upon or incurred by the Escrow Agent hereunder, except as a
result of the gross negligence or willful misconduct of the Escrow
Agent.

     

    9. The
Escrow Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement. The Escrow Agent shall have no liability under, or duty
to inquire into the terms and provisions of, any agreement between the parties,
including the Purchase Agreement. No person, firm or corporation will be
recognized by the Escrow Agent as a successor or assignee of any party until
there shall be presented to the Escrow Agent evidence satisfactory to it of such
succession or assignment. The Escrow Agent may rely upon any instrument in
writing believed in good faith by it to be genuine and sufficient and properly
presented and shall not be liable or responsible for any action taken or omitted
in accordance with the provisions thereof. The Escrow Agent shall not be liable
or responsible for any act it may do or omit to do in connection with the
performance of its duties as Escrow Agent, except for its gross negligence or
willful misconduct.  The Escrow Agent may consult with counsel,
including partners or associates of and attorneys who are of counsel to the
Escrow Agent, and shall be fully protected with respect to any action taken or
omitted by it in good faith on written advice of counsel.

     

    10. The
Escrow Agent may at any time resign hereunder by giving written notice of its
resignation to the other parties hereto, at their addresses set forth below, at
least twenty (20) business days prior to the date specified for such resignation
to take effect.  If the Escrow Agent shall resign, and upon the
effective date of the resignation of the Escrow Agent, all property then held by
the Escrow Agent pursuant to this Agreement shall be delivered by the Escrow
Agent to such person as may be designated in writing by the joint instructions
of the Interested Parties, whereupon all such Escrow Agent’s obligations
hereunder shall cease and terminate.  If no such person shall have
been designated by such date, all of the Escrow Agent’s obligations hereunder
shall, nevertheless, cease and terminate. The Escrow Agent’s sole responsibility
thereafter shall be to keep safely all Make Good Shares then held by the Escrow
Agent and to deliver the same to a person jointly designated as provided in this
Agreement or, if the parties shall have failed to designate a successor escrow
agent, the Escrow Agent may deposit the Make Good Shares into a court of
competent jurisdiction as provided in Section 6 of this Agreement.

     

    11. Any
notice, request, demand and other communication hereunder shall be in writing
and shall be deemed to have been duly given if delivered by facsimile or e-mail
(if receipt is confirmed by the recipient) or sent by messenger or overnight
courier service which provides evidence of delivery or by certified or
registered mail, return receipt requested, postage
prepaid, and shall be deemed given when delivered, if to the Company or Barron
Partners at their addresses set forth on the signature page of this
Agreement.   If any party refuses to accept delivery (other than
notice given by telecopier), notice shall be deemed to have been given on the
date of attempted delivery.  Any party may, by like notice, change the
person, address or telecopier number to which notice should be
sent.

     

    12. This
Agreement shall in all respects be construed and interpreted in accordance with,
and the rights of the parties shall be governed by, the laws of the State of New
York applicable to contracts executed and to be performed wholly within such
State. Each party hereby (a) consents to the exclusive jurisdiction of the
United States district court for the Southern District of New York and Supreme
Court of the State of New York in the County of New York in any action relating
to or arising out of this Agreement, (b) agrees that any process in any action
commenced in such court under this Agreement may be served upon either (i) by
certified or registered mail, return receipt requested, or by messenger or
courier service which obtains evidence of delivery, with the same full force and
effect as if personally served upon him in New York City or (ii) by any other
method of service permitted by law and (c) waives any claim that the
jurisdiction of any such tribunal is not a convenient forum for any such action
and any defense or lack of in personam jurisdiction with respect
thereto.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          Page
3

        

      

    

     

     

     

    13. Section
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement.

     

    14. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, personal representatives, successors and
assigns; provided, that any assignment of this Agreement or their rights
hereunder by any party hereto without the written consent of the other parties
shall be void.  Nothing in this Agreement is intended to confer upon
any other person any rights or remedies under or by reason of this
Agreement.

     

    15. This
Agreement may be executed and delivered in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

     

    16. No
modification, waiver or discharge of any provisions of this Agreement shall bind
any party unless it is in writing, specifically refers to this Agreement and is
signed by or on behalf of the party to be bound or affected
thereby.

     

    17. The
Company agrees to pay Escrow Agent a flat fee of $1,000 for the services
hereunder.

     

     [Remainder
of the Page Intentionally Left Blank]

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          Page
4

        

      

    

     

     

    
 

    Very
truly yours,

    


    


    
      	
              Address

            	 	
              Signature

            
	
              6th Floor,
      Fei Jing International, No. 15 Gaoxin 6 Road, 

              Hi-tech
      Industrial Development Zone,Xi’an, Shaanxi,

              China
      710075

              Phone:86-29-8831-0282\
      8831-0560

              Fax:
      _______________________

               

            	 	
              Company:
      CHINA POWER EQUIPMENT, INC.

              By:______________________________________                        

                    Name:
      Michael S. Segal

                    Title:
      Director

            
	
              Address:

              Escrow,
      LLC

              dba
      Escrow and Agent Service Co., LLC

              20
      Rock Pointe, Suite 204

              Warrenton,
      VA 20186

               

              Phone:
      540-347-2212

              Fax:
      540- 347-2291

            	 	
              AGREED
      TO AND ACCEPTED:

              Escrow,
      LLC

              By:                                                                        

                      Name:
      Johnnie Zarecor

                      Title:
      Vice-President